Does underwriter reputation matter in the municipal bond market?

Daniels, Kenneth N.; Vijayakumar, Jayaraman

doi:10.1016/j.jeconbus.2006.09.002

Cited by 31 publications

(20 citation statements)

References 45 publications

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“…To deal with the potential selectivity bias, we employ a standard Heckman two‐stage selection model (Heckman ; Daniels and Vijayakumar ; Krishnan et al. ).…”

Section: Resultsmentioning

confidence: 99%

“…To deal with the potential selectivity bias, we employ a standard Heckman two-stage selection model (Heckman 1979;Daniels and Vijayakumar 2007;Krishnan et al 2009). In the first stage, we predict the decision to pursue a layoff or divestiture via a probit regression and then compute an inverse Mills ratio (INVMILLS).…”

Section: A Exiting the Market Via A Takeover Or Bankruptcymentioning

confidence: 99%

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Internal Restructuring and Firm Survival

Powell

Yawson

2012

Int Rev Finance

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We examine the impact of two common methods of internal restructuring, layoffs and divestitures on the survival of a sample of UK firms. Using a Poisson regression model, we find that divestitures improve survival likelihood by reducing the probability and speed of market exit via takeover or bankruptcy, whereas layoffs increase the probability and speed of market exit via bankruptcy. Surprisingly, classifying firms into financially distressed and healthy groups, we find that distressed firms are less likely to restructure. Furthermore, while divestitures improve survival likelihood in both groups, layoff firms are less likely to survive, irrespective of whether they are distressed or healthy. Our findings are consistent with event studies that examine the market reaction to layoffs and divestiture decisions, and so provide some support for the view that the market correctly values the consequences of these restructuring actions on firm survival. The results are robust to several econometric and modeling issues, including controlling for potential self-selection bias.

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“…To deal with the potential selectivity bias, we employ a standard Heckman two‐stage selection model (Heckman ; Daniels and Vijayakumar ; Krishnan et al. ).…”

Section: Resultsmentioning

confidence: 99%

Section: A Exiting the Market Via A Takeover Or Bankruptcymentioning

confidence: 99%

Internal Restructuring and Firm Survival

Powell

Yawson

2012

Int Rev Finance

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“…We also include important explanatory variables concerning municipal advisors and municipal underwriters that were found to be significant in previous empirical studies. The study tests for the general impact of municipal advisor quality reputation and location as well as underwriter quality reputation and location (Forbes, Leonard, and Johnson ; Johnson ; Vijayakumar and Daniels ; Daniels and Vijayakumar ; Butler ; Butler, Fauver, and Mortal ; Allen and Dudney ; Luby and Moldogaziev ). For measures of advisor and underwriter quality reputation, we follow Allen and Dudney () procedure and construct a continuous measure of market share ratios of total transactions for each municipal advisor or underwriter in the state annually for a full sample that includes competitive, privately placed, and negotiated sales .…”

Section: Data Sources Variables and Hypothesized Associationsmentioning

confidence: 99%

Too Close for Comfort: Does the Intensity of Municipal Advisor and Underwriter Relationship Impact Borrowing Costs?

Moldogaziev¹,

Luby²

2016

Public Budgeting & Finance

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This research explores the intensity of the relationship between municipal advisors and underwriters, as well as their quality and location, to assess the resulting impact on borrowing costs for negotiated debt. The findings from this research have practical policy implications related to the proper composition of a local government's debt financing team. In addition, the empirical findings shed light on central aspects in debt management networks as determined by the round-trip transaction (RTT) theory, which point at new levers that subnational policy makers may use to gain efficiencies when accessing the municipal debt market.

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“…The recent economic downturn was a painful reminder that LGUs cannot always rely on the availability of capital grants and borrowing to finance their infrastructure needs (Daniels &Vijayakumar, 2007). Reform of the local government financing system is a prerequisite for the success of municipalities in Palestine (World Bank LGPA, 2017).…”

Section: Introductionmentioning

confidence: 99%

Municipal bonds as a tool for financing capital investment in local government units in Palestine

Zedan

Da'as

Awad

2020

Investment Management and Financial Innovations

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Municipal bonds are an option available to many cities to raise long-term financing to finance the infrastructure projects. This study aims to develop and find local measures of creditworthiness that are suitable and applicable for local government units in Palestine. Different variables are recognized to see the effect on the issuance of municipal bonds, macroeconomic variables measured by revenues and expenditures per capita, cost of capital, and unemployment rate. Municipal status variables have subgroup variables of municipality size, financial reporting quality, outstanding debt, and financial distress. Various financial ratios, comparative and cross-sectional analysis, horizontal and vertical analysis were used. These ratios and analysis have been used to determine the municipal status variable. The results of the study were limited to the largest 11 sample municipalities; each is the central local government unit at the governorates and was not generalized for all municipalities in Palestine. The study found that macroeconomic and municipality status affects the issuance of municipal revenue bonds. Based on the study results, municipal bonds are highly recommended. Also, instructions from the Ministry of Local Government need to be established and to enforce municipalities about the declaration date of publishing audited financial statements.

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Does underwriter reputation matter in the municipal bond market?

Cited by 31 publications

References 45 publications

Internal Restructuring and Firm Survival

Internal Restructuring and Firm Survival

Too Close for Comfort: Does the Intensity of Municipal Advisor and Underwriter Relationship Impact Borrowing Costs?

Municipal bonds as a tool for financing capital investment in local government units in Palestine

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